Recognition by the Tax Court That Domestic Abuse Permeates Socioeconomic Strata
By The recent “innocent spouse” tax case of Zaheen v. Commissioner, T.C. Memo. 2026-7, is noteworthy in two respects. One, it reminds us that abuse permeates socioeconomic strata. Two, several objective factors in the analytical framework for innocent spouse cases should have precluded relief to the requesting spouse (here, the wife), but because of corroborated testimony of specific acts of abuse, the court held otherwise.
The petitioner in Zaheen was a medical doctor who was abused (mentally, physically, and sexually) for many years by her husband. The record was replete with facts detailing the abuse, including that he strangled her for eating chocolate. The wife requested and was granted equitable relief from a joint tax liability under IRC § 6015(f). Through the lens of a tax practitioner, the wife was relieved of liability from tax liability emanating from the medical practice she co-owned (meaning her own tax liability) with her husband, who was not a medical provider and therefore did not generate income for the practice.
Preliminarily, note that the IRS agreed that the wife was entitled to innocent-spouse relief, but the non-requesting spouse can (and did) intervene. IRC § 6015(e)(4); T.C. Rule 325.
When evaluating whether a requesting spouse is entitled to relief from the couple’s joint tax debt, the IRS and the Tax Court apply multi-factor tests. The income in this case was from a retirement distribution from the medical practice; the distribution was used to pay the debt of the medical practice, and the transaction used a trust over which, at least on paper, both spouses were trustees. Any of these facts normally would preclude innocent-spouse relief. The wife prevailed by proving her husband’s control of the finances, verbal abuse, threats of physical harm, and deceptive tactics to prevent her from learning about the transaction.
Further, two other factors — constructive knowledge and significant benefit — normally would have precluded the wife from relief. For knowledge, the wife constructively knew of the tax understatement: she signed the return and understood that, given her husband’s secrecy and defensiveness, he might not pay the tax. The court nonetheless held that because of the husband’s abuse and control of financial information, the wife’s constructive knowledge did not bar relief. Regarding significant benefit, notwithstanding that the income giving rise to the understatement was used for assets of the medical practice, because the husband shared the practice until the wife filed for divorce, and because the husband controlled the business finances, the wife would not be penalized.
This case deviates from other innocent spouse cases involving abuse because the tax was from the business the wife co-owned and in which she actively participated. See, e.g., Schultz v. Commissioner, T.C. Memo. 2010-233 (relieving the requesting spouse of tax from only the non-requesting spouse’s income); Nihiser v. Commissioner, T.C. Memo. 2008-135 (concluding that the requesting spouse was not liable for tax from the non-requesting spouse’s income where domestic abuse was alleged).
The holding of the case was very clearly a result of the weight of evidence admitted about the substantial and pervasive abuse. Practitioners should counsel their clients about the public nature of the proceeding, the stress of testifying family members, and whether this information is already disclosed in other proceedings, weighing those aspects with the amount at issue in the corresponding tax case.
By Chris Beck
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